Firms must deploy data driven innovations to appeal to market

Product development and innovations are essential for companies to remain competitive, drive revenue growth, reduce costs, manage risks, enhance their reputation, and prepare for the future.

Without a commitment to innovation, companies risk stagnation and obsolescence in an increasingly dynamic and competitive marketplace. However, the success of innovation comes with a price – it requires investment in funds and processes.

Innovation, if not well thought out in design and implementation, can lead to spiralling costs and misplaced efforts.

One direction organisations with innovation-based strategies can take is to leverage Big Data and Artificial Intelligence (AI). By harnessing big data, businesses can make informed decisions based on real-time insights rather than relying solely on traditional intuition or historical data. This shift towards data-driven strategies allows organisations to adapt more quickly to market changes, identify new opportunities, and mitigate potential risks.

At Ipsos, we are aware that pressure to increase the innovation success rate will intensify for the foreseeable future. That is why we have developed solutions that make it practical for our business to acquire insights that help to reduce uncertainty, increase efficiency, and ultimately enhance the chances of innovation success in a competitive business landscape.

What this means is that our clients can now continuously use data and AI to decode innovation opportunities as they arise and effectively come up with consumer-centric business innovations. When businesses embrace data-driven decision-making, they are well-positioned to better understand their customers, competition, and market dynamics, leading to more appealing and successful innovations.

Kenya occupies an enviable place in Africa as a leading innovation hub. The 2019 Global Innovation Index (GII) by the World Intellectual Property Organisation (WIPO) ranked her as the most innovative country in Sub-Saharan Africa. It is ranked 77th behind South Africa (68) and followed by Mauritius (93), globally.

Sectors that are witnessing a flurry of innovations include agriculture, manufacturing, finance, transport and logistics, and mobile telecommunications. These innovations are being driven by the digital revolution that is sweeping across as well as the ever-changing needs of consumers.

For businesses, innovation is a must. If you want to remain relevant and profitable you need to make innovation a key pillar of your business strategy. Businesses that are not re-inventing themselves are falling and leaving the way for those who are leading through innovations. Companies often rely on business innovation to help reduce expenditures, develop new processes, and increase their appeal to consumers.

By creating a new product or service, redesigning a product or service by adding features, discovering a new material or process, or creating better systems for business organisation and function, a business can increase its market share and customer base.

Niche market

Innovation is an effective strategy for a business to differentiate itself from its competitors, thereby creating a more niche market for its products and services. Its end goal is always to boost revenues and earn the company industry accolades. Product innovation is the most popular and assumed to sum up business innovation. It involves either of the following three cases – developing a new product, enhancing an already existing product, or optimising features of a product. But innovation goes beyond the product.

We have process innovation which considers a combination of resources, technologies, and skills being consumed by an organisation to generate a product or service of value. Its results may not be openly evident to customers, but it leads to long-term benefits in terms of faster time to market, reduced costs, minimal wastage, and enhanced productivity and efficiency.

The fast-changing consumer landscape that is being driven by advancements in digital technologies and global challenges such as Covid-19 and climate change have also given rise to various innovations in business models.

These issues have heralded new challenges and unlocked new opportunities, making it imperative for organisations to come up with new business models to confront present realities. While in the past decades, any company that wanted to innovate would simply go around and ask customers what they wanted and implement it, that era is long gone.

In today’s world, we are faced with situations where more than 72 per cent of product launches and innovations fail to get traction in the market, hence failing to meet their financial targets.

In Kenya, a study conducted by researchers from Karatina University and the Cooperatives University of Kenya involving 101 manufacturing firms revealed that some businesses had as many as 13 new products but ended up patenting only five.

The study was published in 2020 in the International Journal of Innovation Studies. The ability to innovate in an agile and sustainable manner has never been more essential to survive.

We are living in a volatile business era constantly disrupted by technological shifts, new “out of the box” business models, and a rapidly changing consumer culture. Furthermore, 90 per cent of corporate innovations fail, according to Mark Payne in “How to Kill a Unicorn”.

Understanding the root cause of failure has always been challenging. But one critical aspect is the systematic issue of large corporations tending to base their innovation efforts on past successes.

The author is a Research Manager, Innovation at Ipsos in Kenya